Danny Kruger: There are no easy solutions to unemployment

Last week David Cameron hosted a visit by the Dutch Prime Minister. Not to be outdone, I had a meeting yesterday with the deputy mayor of The Hague. He gave me (my first ever diplomatic gift) a lovely fountain pen.

The deputy mayor wanted to know about the Big Society, but he ended up teaching me something about job creation and citizenship. Ten years ago The Hague city government had a bright idea about how to deal with their jobless young. They drafted them into low-paid posts as park attendants and lollypop ladies.

The result was predictable but not, apparently, predicted. All the volunteers who used to help out in the park and at the school gates were made redundant by the army of young people on government schemes.

Now The Hague is looking to the Big Society for ideas on how to inspire citizen activism – and we are considering making the mistake they made ten years ago.

As the youth unemployment figure passed the million mark this week there are calls from all quarters to create jobs artificially, funnel the jobless young into temporary posts (whether paid or voluntary) designed to teach them the habits of work and, simultaneously, boost the economy (and no doubt reduce the NEET figures).

I literally can’t see the way through here. On the one hand we need to find something for the legion of school leavers to do, and evidence shows that simply attending work – even flipping burgers or sweeping streets – instils the disciplines and responsibility you need to get a better job. On the other hand, pointless non-jobs cannot be good either for the nation’s finances or the self-respect of the people involved.

In the Paris Commune of 1870, it is said, men were employed by the state to collect water from the Seine on one side of the Isle de la Cite and pour it out on the other. At least they didn’t crowd out voluntary and private sector water-pourers.

Ultimately, we will reduce youth unemployment by growing the private sector, and particularly SMEs, as a share of the economy, and by tackling young people’s attitudinal barriers to hard work and long-term life planning. Neither of these ambitions will be served by paying them to do jobs that aren’t needed.

Meanwhile there are complaints on all sides that interns should be paid, and that Job Centres shouldn’t be requiring people to do unpaid work to justify their JobSeekers Allowance (some lawyers are seriously challenging this scheme on the grounds that ‘forced or compulsory labour’ is illegal under the Human Rights Act. This would be evil if it weren’t so preposterous).

In the last week I have heard Labour complain about the number of fiftysomethings facing unemployment, the number of young people out of work, and the number of civil servants being laid off – as if Government can somehow provide jobs for the whole population.

This is, of course, the essence of Labour’s economic policy: borrow money to create, or save, public sector jobs so that their wages will fuel consumption and stimulate growth. There is something wrong here, like a failed Excel formula with a circular reference.